Here's Why You Should Buy W&T Offshore Stock Right Away

W&T Offshore, Inc. WTI, on Mar 20, was upgraded to a Zacks Rank #1 (Strong Buy).

Why the Upgrade?

The company has recently released some positive news that is bound to help the company in the long run. On Mar 12, 2018, the company signed a joint exploration and development deal with an investor group, which will enable the company to drill 14 projects in the prolific Gulf of Mexico for more than three years. Initially, W&T Offshore will receive 30% of the net revenues from the project, which can later increase to 38.4%. The deal is expected to help the company develop its high-return inventory.

Additionally, W&T Offshore successfully bid on an interest in three blocks in the Gulf of Mexico’s Heidelberg field. The bid by the company covers Cobalt International Energy’s entire interest in the field, which has filed for Chapter 11 bankruptcy. Cobalt's production in February 2018 from the assets was approximately 3,000 barrels of oil equivalent per day. W&T Offshore bid $31.1 million cash for the interest as the quality of the assets satisfies the company’s acquisition criteria.

Moreover, the leading oil and gas explorer has an impressive earnings surprise history, the average positive earnings surprise being 542.8% in the trailing four quarters.

W&T Offshore’s total proved oil equivalent reserves – as of Dec 31, 2017 – was 74.2 million barrels, marginally higher than 2016.

W&T Offshore has set a capital budget of $130 million for 2018 that will be spent for the oil-rich projects. The decision seems impressive given that the company has a trailing 12-month return on capital investment of 21.7%, significantly higher than 2% of the industry it belongs to. 

Also, the Houston, TX-based upstream energy firm has gained 39.7% in the last year against the industry’s 12.4% decline.

 

 

Other Stocks to Consider

Other top-ranked stocks in the oil and energy sector are Pioneer Natural Resources Company PXD, Continental Resources, Inc. CLR and ConocoPhillips COP. While Pioneer Natural and Continental Resources sport a Zacks Rank #1, ConocoPhillips has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Irving, TX-based Pioneer Natural is an independent oil and gas exploration and production company. Its revenues for first-quarter 2018 are anticipated to improve 22.8% from the prior-year quarter. The company witnessed a positive average earnings surprise of 66.9% in the trailing four quarters.

Oklahoma City, OK-based Continental Resources is an oil and gas exploration and production company. Its revenues for first-quarter 2018 are expected to improve 55.1% from the year-ago quarter. For 2018, the bottom line is anticipated to be up 366.7%.

Houston, TX-based ConocoPhillips is an upstream energy player. Its revenues for first-quarter 2018 are anticipated to improve 9.6% from the prior-year quarter. The company witnessed a positive average earnings surprise of 144.5% in the trailing four quarters.

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